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Shipping Promotions That Drive Sales

Nov 1, 2008
by Eric Leuenberger

With the holidays quickly approaching, there is no better time to take a close look at the shipping offers you provide your customers.

It surprises me how many online store owners I speak with give little importance to the shipping offers they provide to their customers. An online merchant cannot ignore that their customers not only want to know how much extra it will cost to have an item shipped, but will oftentimes make their final buying decision based on the offers presented.

Time and time again, tests have been run on what types of shipping options work best to drive sales. In surveys of what customers want, and even expect, from online stores, free shipping offers consistently top the list. Many people actually search for "free shipping," on the Internet.

Shipping Promotions

In my work for clients, I constantly test conversion strategies in a continual effort to increase sales. I have tested numerous shipping methods across multiple markets in an effort to determine which combination provided the most immediate benefits to sales.

This diverse sampling of data paints a realistic picture of which combinations truly play the biggest part in generating sales. Six different shipping promotions were tested:
  1. Flat rate shipping on anything ordered. One price. Unlimited items.
  2. Flat rate shipping combined with optional rush / overnight shipping.
  3. Free shipping on orders that exceeded a predetermined amount.
  4. Free shipping on all orders.
  5. Free shipping combined with optional rush / overnight shipping.
  6. Real time shipping quotes from various carriers.

Each offer was implemented and rotated over several weeks' time across the test sites. Depending on the amount of traffic your site receives, you may need to run a test longer to get a more accurate data sample. Generally, the more traffic a site receives, the shorter the test time. Make sure your margin of error is small enough to determine the most successful promotion.

And the Winner is ...

After testing was completed, the winning combination proved to be free shipping on orders over a predetermined amount. In fact, offering free Priority Mail shipping on orders over a predetermined amount produced better results, even when the price of the products was increased to cover that margin. This twist shows the pulling power free shipping has on buyers' decision making.

Testing revealed that in many cases, online buyers will overlook the price of an item to get free shipping. This of course will vary among buyers and industries. In industries with more common products, buyers may be more price-sensitive when making buying decisions. However, the overall consensus remains the same: Free shipping has an impact on sales.

Ask yourself this question: What are two things most online shoppers want? They want to recieve their product promptly and they want it shipped for free.

Building on this logic, the following copy was tested when offering free Priority Mail shipping on orders over a certain dollar amount: "Get it Fast. Get it FREE!" To cover the cost of the Priority Mailing, prices were increased slightly on various products. When this copy was added, there was almost an instant positive impact on sales. Crafting persuasive copy that takes advantage of the psychological power of both elements further bolsters the effect free shipping can have, even when prices are increased to cover the extra overhead. This is especially true if your product is available through local brick-and-mortar stores: If the product can be purchased at a brick-and-mortar store close to the customer, then the idea of free shipping becomes even more of a factor in determining where and when they will buy. Providing your products are not offered exclusively online, potential customers will weigh the benefit of purchasing online versus driving to the local store. When urgency is not a factor, oftentimes the choice is made based on shipping.

Why Free Shipping With Conditions?

Free shipping for orders over a predetermined amount achieves two things:
  1. An increase in the number of overall sales.
  2. An increases in the average order value when planned properly.

Both of the above cause growth in your company while at the same time satisfying your customer wants and needs. Simply stated, free shipping works, and oftentimes is even expected by online buyers. If you are not offering it to your customers, you might be missing out.

Eric Leuenberger is an ecommerce conversion expert and author of a leading Ecommerce Optimization blog (www.zencartoptimization.com). He coaches etailer's, wholesaler's, distributor's and manufacturer's how to increase their website sales through skillfully crafted online search advertising, targeted market strategies and website sales strategies. He can be contacted at 1-877-481-2323 or visit www.enhancedconcepts.com for more information.

Topic: Business Strategies

Related Articles: shipping 

Article ID: 813

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